Rising Costs, Coastal Shoe Companies Forced To Move Inland

Rising costs and appreciation of the renminbi have plunged thousands of shoe factories on the coast into bankruptcy.

Chinese shoemaking enterprises are moving factories from coastal provinces to cheaper inland.

According to Reuters, the AOKANG group, based in Zhejiang Province, invested and built industrial parks for shoemaking and supporting enterprises in Chongqing in 2003. The two phase of the project has already started and plans to reach 100 million pairs of shoes with an annual production scale by 2012.

Dongguan's new company has recently opened a new factory in Sichuan and plans to add 8 production lines to neighboring Chongqing.

Jerry Shum, spokesman for Yuyuan industries (Group) Limited, a large international brand OEM company such as Adidas, Nike and Timber-land, said that Yuyuan is also studying the possibility of setting up factories in Western China, and is also an option for Indonesia and Vietnam.

Yu Yuan currently has several factories in Dongguan.

China's shoe making industry is the largest in the world, and is currently suffering from rising labor costs and rising prices of energy and raw materials. The appreciation of the renminbi has also weakened the price advantage of product exports.

In the recent press release, AOKANG group quoted industry data, saying that more than 1000 of the 6000 shoemaking enterprises in Guangdong province were closed last year, and AOKANG Manru manufacturer manager Fan Manru said, "the cost of manufacturing a pair of shoes has risen 20% in the past year, but most enterprises are unable to raise their selling price.